New Belgium Brewing Marketing Strategy to Expand Essay Example
BA 580
June 28, 2011
New Belgium Brewing
Case Study Analysis
New Belgium brewery has increasingly grew throughout the years since their development in 1991. Despite the dominance of the “Big Three” (Budweiser, Miller, and Coors), NBB needs to be aggressive and strive to invest in the attractive beer industry in able to grow more. If positioned correctly, NBB and its main brand, Fat Tire, can continually grow. An evaluation of the industry, the business itself, its brands, and the customers and competitors is needed in order to be continuously successful. The brewing industry can be characterized by Porter’s Five Forces framework. New entries to brewing have a relative ease in creating home micro-breweries, which is aided by the simplicity of the brewing process. Micro-breweries are measured as producing less than 15,000 barrels of beer per year with 75% or more of the beer sold off-site. However, in order to mass produce beers to competitive market levels, more expensive technologies are needed. This provides some protection to established firms in the industry. In addition, the expert knowledge of the brew-masters in the established firms takes years of hands-on experience to acquire, knowledge which is not readily available to most new entrants. The bargaining power in the industry belongs to the customers due to the variety of craft beers throughout the country and specialty, regional beers. Substitutes for beer include liquors, wines, sodas, teas, juices, and sports drinks. The wide variety of alternative options for consumers is a general threat to the brewing industry. Supplies are generally bought by brewers, with New Belgium providing an example by getting their raw malt materials from the United States and Canada, hops from the Pacific Northwest, and packaging material from Colorado. Then the rivalries within the industry are pretty intense, with the three major players in the domestic market (Budweiser, Miller, Coors), mid-major
June 28, 2011
New Belgium Brewing
Case Study Analysis
New Belgium brewery has increasingly grew throughout the years since their development in 1991. Despite the dominance of the “Big Three” (Budweiser, Miller, and Coors), NBB needs to be aggressive and strive to invest in the attractive beer industry in able to grow more. If positioned correctly, NBB and its main brand, Fat Tire, can continually grow. An evaluation of the industry, the business itself, its brands, and the customers and competitors is needed in order to be continuously successful. The brewing industry can be characterized by Porter’s Five Forces framework. New entries to brewing have a relative ease in creating home micro-breweries, which is aided by the simplicity of the brewing process. Micro-breweries are measured as producing less than 15,000 barrels of beer per year with 75% or more of the beer sold off-site. However, in order to mass produce beers to competitive market levels, more expensive technologies are needed. This provides some protection to established firms in the industry. In addition, the expert knowledge of the brew-masters in the established firms takes years of hands-on experience to acquire, knowledge which is not readily available to most new entrants. The bargaining power in the industry belongs to the customers due to the variety of craft beers throughout the country and specialty, regional beers. Substitutes for beer include liquors, wines, sodas, teas, juices, and sports drinks. The wide variety of alternative options for consumers is a general threat to the brewing industry. Supplies are generally bought by brewers, with New Belgium providing an example by getting their raw malt materials from the United States and Canada, hops from the Pacific Northwest, and packaging material from Colorado. Then the rivalries within the industry are pretty intense, with the three major players in the domestic market (Budweiser, Miller, Coors), mid-major